In Washington, what is the limitation on transfer fees that Card My Yard can collect?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
If the proposed transfer is to a corporation or other entity
wholly owned by you and formed solely for the convenience of ownership, our consent may be conditioned upon any of the requirements in Section XV.B., except that Sections XV.B.(3), (4), (5), and (7) shall not apply, and the fee provided for in Section XV.B.(9) shall be limited to our reasonable out-of-pocket costs and expenses (including legal and accounting fees and costs) related to such transfer. In any transfer for the convenience of ownership, you must be the owner of all the voting stock or ownership interests in the new entity, or, if you are more than one individual, each individual shall have the same proportionate ownership interest in the new entity as he or she had in you before the transfer.
- D.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, the standard transfer fee is the greater of $3,000 or 5% of the sale/transfer price. However, this fee may be limited in the case of a transfer for the convenience of ownership.
If a Card My Yard franchisee transfers ownership to a corporation or other entity wholly owned by them, formed solely for convenience, the transfer fee is limited to Card My Yard's reasonable out-of-pocket costs and expenses. These costs include legal and accounting fees related to the transfer.
This reduced fee for convenience transfers provides an opportunity for Card My Yard franchisees to restructure their business for personal or tax reasons without incurring a significant transfer fee, provided they maintain full ownership and control. However, it's important to note that this exception only applies if the transfer is genuinely for convenience of ownership and the franchisee retains complete ownership.